Monday, October 6, 2008

Emissions unity is elusive

The world has to reduce greenhouse gas emissions, but there is little consensus on who should do the most.

IN THE financial crisis, the world's governments have acted largely as one. But long after the financial crisis is resolved, those governments will still be grappling with a far more long-term issue: global warming. And right now it looks unlikely that they will show the same unity of purpose to save the planet as they have to save the financial system.

In two months, we will get our first glimpse of how much each country is prepared to do. In Poland's western city of Poznan, ministers will start two weeks of talks on December 1, at the midpoint between when climate change negotiations were launched last year in Bali — where Kevin Rudd declared that Australia would ratify the Kyoto Protocol — and the climax of those negotiations in Copenhagen at the end of next year, when the world is due

to decide how it plans to tackle global warming.

The signs are not bleak, but nor are they promising. On one hand, concern about global warming is growing, not least in China and India, the two countries in which most of the world's growth in greenhouse gas emissions between now and 2050 is likely to take place.

The 27 members of the European Union and the three pilot fish who swim with them (Switzerland, Norway and Iceland) are already significantly reducing their emissions, and will soon finalise a trading scheme designed to cut their emissions by 2020 to 20% below their 1990 levels. New Zealand has just adopted an emissions trading scheme and Australia — so long a stand-out against the global consensus — is about to do the same.

But what individual countries do matters less than what the world does. Even when Australia becomes the 32nd country to adopt emissions trading, only 16% of the world's carbon dioxide emissions will be included in reduction schemes. Within four years they are likely to be followed by the US (20.3%), Japan (4.3%), Canada (1.9%) and possibly South Korea (1.7%) and Taiwan (1%). That would put 45% of the world's emissions on a downward path — but the other 55% would still be growing, in some cases rapidly.

Up to now, the global consensus has been that climate change should involve all countries, but with "separate and differentiated targets". In practice, this is taken to mean that the West should commit to reducing its greenhouse gas emissions, while developing countries should reduce the rate at which their emissions grow.

But Australia is now challenging that consensus. In his final report, the Government's climate change adviser, Ross Garnaut, noted that on current policy settings, by 2030 emissions from developing countries alone would be 60% above the amount needed to hold greenhouse gas concentrations in the atmosphere to 450 parts per million.

The consensus that "only one group of countries is responsible for containing emissions is no longer viable", Garnaut concluded. "All countries need to be jointly responsible." In a provocative proposal, he suggested that China, Russia, and all countries on above-average incomes — even those close to the average, such as Malaysia, Mexico and Iran — should be required to accept binding emission limits in any post-Kyoto agreement. Other developing countries, such as India and Indonesia, should be required to accept targets to limit their future growth in emissions, but with no penalties if they fail to comply. Only the 50 or so least developed countries, such as East Timor, Bangladesh and most of Africa, would be unconstrained.

It is not yet clear whether the Australian Government will accept this, but it is certainly not the view in Europe. Officials I have spoken to here agree that developing countries will have to slow the growth in their emissions sharply if the world is to avoid the risks of serious overheating, but they see the best way of doing this as being to offer them carrots — low-emissions technology at low cost, aid to adapt to unavoidable changes, links to allow their carbon savings to count against the West's emissions targets, aid to end forest clearing, and so on.

Brice Lalonde, the long-time environmentalist who is France's ambassador for climate change, says one goal for the conference in Poznan is to sort out how the rich countries should help developing countries restrain emissions but not economic growth. And the other, he says, is to show that the world is united behind the 450ppm target, which scientists say would restrain global temperatures to roughly 2 degrees above pre-industrial levels.

Garnaut says this is "desirable", but in 2009 it would be more "feasible" to agree on a target of 550ppm, then tighten it later as global consciousness of the problem increases. And while tackling climate change is a top-level issue in western Europe and Australia, it is not seen as critical in eastern Europe, in developing countries such as India or China, or even in the US Congress, which will have to ratify any deal.

Politics makes it inevitable that Australia's emissions trading scheme will have to be designed jointly by Labor and the Liberals; it would be preferable if it were approached that way, with a joint working party from both sides taking charge of the issue now. And global politics makes it inevitable that any deal in Copenhagen will jointly be designed by those who want to tackle climate change hard, and those who do not. It will be Copenhagen-lite.

For now, Europe and Australia appear to be on different tacks, the US is effectively leaderless, Canada is in an election campaign, Japan and its neighbours are waiting to see what happens — and the developing world, by and large, is expecting that any deal in Copenhagen will make the West do the work.

Economics editor Tim Colebatch is touring Europe as a guest of the European Commission.